About this Show

First Business

News/Business. Angie Miles. (2013) New. (CC) (Stereo)

NETWORK

DURATION
00:30:00

RATING
G

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Channel 80 (561 MHz)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
704

PIXEL HEIGHT
480

TOPIC FREQUENCY

Us 7, China 5, S&p 4, Facebook 4, Faa 3, Angela 2, Boeing 2, Ford 2, Blackberry 2, Terri Duhon 2, Zuckerberg 2, Andrew Keene 2, Chicago 2, Tcl 2, America 2, Sam 2, Texas 2, U.s. 2, Obama 1, El Paso 1,
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  KICU    First Business    News/Business. Angie Miles.  
    (2013) New. (CC) (Stereo)  

    January 14, 2013
    4:00 - 4:30am PST  

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will foreign car companies dominate this year's auto show in the motor city? in today's cover story, facebook has a major announcement this week. why timing could be everything. plus, chemicals meant to prevent fires are causing more harm than good. and, we'll head to the trading floor with a pro and find out what keeps the financial industry in the pits. and a new problem surfaces for this year's wheat crop. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. on this monday, january 14th. i'm angela miles. in today's first look: it may be a trade-with-caution kind of a session. that's because federal reserve chairman ben bernanke delivers a
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speech right at the market close today at the university of michigan. he will be taking questions from reporters. the week starts with the s&p 500 still above 1470. stocks have now made gains two weeks in a row to in the new year. best buy was one of the top- performing stocks in the s&p friday. shares gained $2 after reporting holiday sales weren't as bad as traders thought. and blackberry is building a buzz over its new smartphone rolling out at the end of the month. reports say verizon, sprint, t-mobile and at&t all plan to provide networks for the blackberry 10. it's considered a major victory for reach in motion. what better way than to start the morning with tim mulholland of china-america capital? good monday morning to you. > > good morning angela. > what do you anticipate in the market for the week? > > we are off to a very strong start to the year. we get some
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retail sales data and inflation data this week. inflation data we may start to pay more attention to as the year goes on, given the 2.5% cpi bar that the fed has set for stopping its policy of quantitative easing. > how much credence are traders giving the inflation problem in china? > > they might be giving it more than it deserves. there was a cold spell that was somewhat seasonal. the figure was slightly higher than expected. but i think where people are missing the point is, i don't think a rate cut was even in the cards for china to begin with. that is something i think policymakers have made very clear, they weren't really going to use interest rates as a tool here, because they are still combatting a real estate issue. so i think they are making a little too much of it. i think we will forget about that - especially later this week, we get quarter 4 gdp in china, which is expected around 7.8%, higher than what people had thought previously. > what is your forecast for natural gas for this year? > > tell me what the weather is
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going to be like. > exactly. > > it seems to me like it has got a little bit of pressure here, supply pressure, so my guess would probably be lower. but you tell me the weather and then i will give you a better guess. > i wish i knew the answer to that. good to have you on the show. have a good trading week. > > thanks angela. you too. this week, facebook hopes to broaden its appeal with a new addition to the social media website. details aren't out, but the timing couldn't be better. its stock is rising, and jp morgan just named facebook the "top pick" among large-cap internet stocks for 2013. facebook's teasingly vague invite "come and see what we're building" fueled speculation and interest - and worked perfectly. "it could be a phone." since last summer, published reports told of a facebook phone that may debut this year. the company's hired staffers who worked on iphone design and the palm operating system for mobile phones. but ceo mark zuckerberg downplayed speculation, saying at facebook's first earnings report
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last july, 'building out a whole phone wouldn't make sense for us to do." "two leading suggestions are a music service or shopping service. retailers want a shopping service to better balance amazon." after facebook's ipo last may, in which stock fluctuated between 18 and 45 dollars, zuckerberg said facebook's focus needed to shift away from desktop use. half of the website's one-billion users do so from mobile devices. its own phone or software that makes shopping as easy as talking or texting may be the next source of revenue. "maybe even have little shopping carts on the facebook page. the question is, are they at step one of this or step five? we want to know how far they are along these lines." zuckerberg has also talked about the need to improve facebook searching. that is also among improvements that may be announced tomorrow.
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this week, house republicans will hold a retreat in williamsburg, virgina. it's expected it will be a strategy session on the debt limit talks next week. president obama has said he will not negoatiate on raising the $16.4 trillion debt ceiling, while house republican leader john boehner is insisting a debt increase would have to be accompanied by spending cuts to programs such as medicare. boehner has promised a vote tomorrow on $51 billion in aid to hurricane sandy vicitms. theres alot up in the air at boeing after a series of leaks and electrical glitches last week involving its latest aircraft, dubbed the 787 dreamliner. the faa will begin reviewing how the airliner is designed, manufacturered and assembled, with particular attention to the miles of electrical wiring used instead of heavier hydrallic systems. in a statement, boeing says "we are never satisfied while there
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is room for improvement. we welcome this opportunity to conduct this joint review." joe schwieterman of depaul university says it is too early for investors to be worried. "investors get nervous when there are these rollouts and there are problems. if this gets worse, boeing's stock could be affected, but i doubt it will be at this point. but who knows what will be revealed as these inspections unfold?" meanwhile, the airline is expanding and contracting on the ground. it's opening its third factory in salt lake city, utah, which will manufacture a tailpiece for the dreamliner, adding 100 jobs. however, it is cutting 160 jobs and scaling back its aerospace plant in el paso, texas, due to defense
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budget cuts. meanwhile, the faa is out with a warning about exploding coffee filters on board flights. if the filters are placed incorrectly in a coffee maker, pressure builds up and the filter can burst, causing an explosion of hot water. according to the faa, it could cause first and second degree burns to crewmembers or passengers. the north american international auto show kicks off today in detroit. it's putting focus on the city that has been attempting to rebuild itself in the years following the financial crisis. the city's mayor, david bing, says that the auto show venue - recently remodeled cobo center - is "ready for the world" and that soon "detroit is going to be, again, ready for the world." reports say this year's show will be a big year for toyota and lexus. the auto show offcially opens to the public
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on the 19th. ford is revving up its staff due to strong sales demand. the automaker plans to add 2200 jobs this year in its largest white-collar hiring in a decade. in a deal with the united autoworkers' union, ford plans to add 12,000 new hourly jobs in the united states by 2015. that's in addition to 8,000 hourly and salaried positions added in 2012. shares in ford were higher friday on optimistic reports from analysts, and closed at $14. a wave of cold weather is hitting wheat crops in the u.s. plains. wheat has already been slammed with the worst drought in more than 50 years, and a cold snap with little to no snow could have a big impact on farmland and cattle in the mid- states. grain supply estimates will already be tight this year, and there is increased demand for animal feed, according to the u.s. department of agriculture. corn, soybean and wheat futures have soared on the weather forecasts. the u.s. postal service is closer to the brink of bankruptcy. it's estimated by march the agency could struggle
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to operate. the postal service had no debt as of 2005, but because of email and congress requiring it to pre-fund healthcare benefits for future retirees, the usps is cash- strapped. one other mention - a federal appeals court ruled post office gave special treatment to netflix, and can no longer discriminate against other mail-order companies. the challenge was filed by video game rental service gamefly. the video gaming industry continues to lose players. sales of games and consoles were down 22% in 2012. sales declined 9% the previous year. it's attributed to players trending toward new digital devices and game producers such as microsoft investing in more popular titles only. the industry could face challeges ahead as gun control measures are expected out of washington. video game creators met with vice president joe biden last week. the obama administration is seeking information from the industry on factors that influence violence following
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last month's shootings in newtown, conneticut. salaries for new grads are on the rise. the job market is still lagging, but starting salaries for 2012 college grads are up 3.4% according to a new survey. salaries in education grew the most, at 5.4% over last year. the average salary ranges from the mid-30s for health and human service jobs to 60 thousand dollars for engineering grads. the famous grauman chinese theater in hollywood has a new name. it will now be called the tcl chinese theater, after chinese tv-maker tcl bought naming rights to the 85-year- old theater. it is an icon of hollywood and draws about 4 million visitors each year for red-carpet premiers. tcl's ceo hopes a hollywood presence will increase the company's profile and better connect the cultures of china and north america. still to come, zoning in on the trading floor. a look at how traders pushed to take big bets. that's later. but first, the shocking truth
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over the web of lies about flame retardents. why it's more toxic than you think. bill moller joins us next, after this "in the know" message.
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last spring the chicago tribune broke an explosive story about toxic flame retards used in furniture & the deceptive campaign to create demand for these chemicals. the reporting
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brought on all kinds of federal and state scrutiny. now the industry has come forward with a scientific report which has already been cited in congressional hearings. in a follow-up investigation, the tribune has found this study too is highly flawed. reporter sam roe wrote the story for the paper. first sam, in a nutshell, what did the paper find as to these flame retardants? > > the flame retardants don't work as advertised. they're in furniture throughout america and virtually every home, which would be great if they slowed fires, but what we found is that the data doesn't support that. they are not really effective, yet they pose health risks: they get out, they migrate, they get into us, they get into our bodies, and- > and cause problems. not only did they not work, but they cause perhaps more harm than
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good. > > right. so the question is why do we even have them in there in the first place? > what about this particular study? who conducted it and what did it find? > > it was conducted by a man by the name of matthew blais at the southwest research institute in texas. and the main finding was that flame retardants do work. here is a new study that once again shows that we need to have these chemicals in the home. but when you drill down into the underlying data- > as you did over the course of four or five months. > > four or five months on one paper, and you see the data doesn't support that and there is misleading conclusions, twisting of the data. so i think once again the chemical industry is relying on a study that just is not true. > and the scientist himself - you wouldn't say he's in bed with the industry, but he is certainly involved. > > he is in line with the industry. he is a scientific
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adviser to the flame retardant manufacturers. and this was his very first paper he ever wrote on the topic. > so it was being cited. what is happening now with the report and the industry at large? > > the industry at large has been on the defensive for almost a year since our original story came out in may. the state of california wants to change things so that these flame retardants will be removed from furniture across the country. the industry is fighting back. they are pulling out studies saying, "look, here, it works," or, "this study over here proves that we are right." but it looks like at this point there will be some significant change and that the chemical industry will probably lose this one. > sam, let me ask you, what does that feel like, to be leading and involved in a team that does this kind of research, does this kind of reporting, that actually makes significant change in society. > > you have to hand it to the tribune. i spent almost two years working on this one topic, and it is sort of rare in our field to spend four or five months working on just taking a look at one particular study. that is really rare. so i'm thankful to be part of that. > it's gratifying. > > it is an important public issue. these are chemicals that more and more science is proving can harm us, and if they don't need to be there, that needs to be addressed. > sam roe from the chicago tribune. thanks so much. > > thank you. angie's going to be talking about the trading floor and the rather unique role that it plays in the financial industry -
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trade secrets. only people on the trading floor or working behind computer screens at large financial firms are in- the-know about what's driving our financial industry. joining us now via skype to share some insights, terri duhon. she's the author of "how the trading floor really works." thank you for coming on the show. we are so pleased to have you here. > > thank you for having me. > you are a former derivative trader for jp morgan. what do you think the public would find most shocking to know about what's going on behind the
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scenes? > > you know, i think what most people don't understand is that actually the way the banking industry works is that people are actually incentivized to take risk. so, to some extent, a lot of the risks that were taken and a lot of the losses that occurred weren't a big surprise if you understood that actually individuals had to make decisions to take those risks, and often they make decisions based on the fact that they are paid to take more risk. because the more risk they take, the more money they make, the more they're paid, that kind of thing. > what are the dynamics of the trading floor that lend to that risk-taking? > > the fact is that the role of the bank is to provide a service to the financial markets, and the bank provides prices to its clients when clients want to do a financial trade. and that simply means that if a client wants to buy a bond or sell a bond or buy a stock or derivative or whatever the transaction is, the trader
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on the trading floor within the bank provides them a price to do that. so the trader, to some extent, is forced to trade - buy or sell - depending on what the client wants to do. and that gives the bank risk as a result, market risk, because the price can go up or down after that. those are judgments that the bank trader, an individual, is required to make throughout the day. > do you think the situation is getting any better? do you think the banks are actually being reined in? > > i am a little skeptical to be fair. i think a lot of the regulation is very complicated. it's hard to understand where they are going at the moment. there is still a lot of debate about what it is going to be like in the future, and i'm not 100% sure we're attacking all the right issues. > should there be more regulation or less regulation? > > i think we already have too much and i am not sure it was working in the first place. > good to have you on the show. that is terri duhon, author of "how the trading floor really works." just ahead, a trader who is getting into position for this week's top earnings reports.
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chart talk is next.
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andrew keene, president of keeneonthemarket.com, joins us now for a closer look at a couple stocks with earnings coming out in the near term. good to have you on the show on this monday morning andrew. > > thanks for having me on. > let's start with ebay. you really like this stock. why? > > yes. i have been talking about it for a while. ebay is my number one pick for 2013. yes, it is no longer apple, it is ebay. i will tell you why: they have paypal, and paypal is accelerating on the mobile platform. it is doing very, very well. it helps push ebay. ebay has had concerns in the past about counterfeit items, fake items. that seems like it's been panned out. now paypal business is really generating a lot of revenue and profit for them. if they ever spin this business off, i think this company is worth a lot more. chart looks great. i think this one is headed way higher. > this chart is gorgeous. > > gorgeous! > it's beautiful! you want to own a stock that looks like this, correct? but will it
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continue that climb? > > i think it can get up to the $57 level. if you look at where it trades, it basically trades in these $4 increments for three to four months. it just broke that $49 level last time on earnings. last time it was up on earnings, the time before that it was up on earnings. they are expecting about 69¢. i have heard whispers around 72¢. i think it can break $4 higher. so i'm looking at a high of $57. > you also are here to talk about a big bank that reports in citigroup. what about this chart andrew? > > this is interesting. the banks have almost gone parabolic. we see these banks so strong. bank of america was the number one stock in the s&p 500 futures. we saw wells fargo report earnings on friday. did they have a good quarter? yes. did they surprise? no. so wells fargo sold off a little bit, not that much. the banks i think will continue to be very strong in 2013, and the reason i think the banks are going to be strong is because if interest rates do climb higher, that is good for the banks. looks like housing is on the right road to recovery. that will help their
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business models as well. i have not played the banks to the long side. i'll be honest, i have missed some of the money because four out of the five best stocks in the s&p were the banks last year. citi look strong. it has almost gone parabolic. i would rather be a buyer on a dip. if it gets down to $41 or even $40.50, i would rather be buying it there than buying it on a 52-week high. > that's andrew keene, president of keeneonthemarket.com, giving up apple for ebay. have a good day. > > thank you, you too. that's the end of the road for us today. coming up tomorrow, the ceo of volkswagen will be here to explain the stragety behind selling more cars in china than in its own backyard of europe as vw fights to become the number one car company in the world. from all of us at first business, have a great start to your week!